Press releases
Acquisition of Spains leading specialist games retailer
08/06/2001
Electronics Boutique Plc ('EB' or 'the Company') announces the acquisition of CentroMAIL, the leading specialist retailer of video games and computer software in Spain, for a consideration of up to £3.6 million in cash. The acquisition represents EB's first significant move into Continental Europe.
CentroMAIL has a proven track record of profitability. Most recently, the unaudited management accounts for the seven and a half months since its acquisition by Gameplay plc, show turnover of Ptas 2,699 million (£9.92 million) and profit before taxation of Ptas 35 million (£0.13 million). At 30 April 2001, net assets are estimated to have been Ptas 395 million (£1.46 million).
CentroMAIL was founded fourteen years ago and, since then, has developed the largest specialist chain of video game and computer software stores in Spain, with an estimated market share of around 13% (including sales through its franchised outlets).
The Spanish video games and software market is the fifth largest in Europe. In addition, retail sales in Spain have been growing at the fastest rate in Europe for the past four years.
CentroMAIL's operations include a national network of 69 stores across Spain, 11 owned and 58 franchised. It also has a mail and web order operation, an on-line games service and wholesaling activities supplying its own chain and third-party retailers.
CentroMAIL, like EB, is the leading specialist retailer of video games and software in its marketplace; it has a significant market share; it has a core customer focus; it already operates a successful customer loyalty scheme; and it retains strong relationships with games publishers. The Directors of EB believe that these reasons, together with the quality of CentroMAIL's management, will allow a rapid and successful integration of the two businesses.
The CentroMAIL management team have agreed to invest £1.0 million into the business on an unsecured basis, repayable in equal instalments in January 2004 and July 2006, and have also provided certain representations and warranties to EB, in addition to those given by the vendor. EB has also entered into arrangements with the five key management executives (two of whom founded the business) that will enable them to receive up to a maximum of £3.5 million, subject to the achievement of certain profit targets over the period to 31 January 2004.
Martin Long, Deputy Chief Executive of EB, said:
'Continental Europe is a logical next step in the growth of Electronics Boutique. In CentroMAIL we have acquired a market leading business with a well proven management team at a time when the prospects for our industry are very positive.'
Pablo Crespo Garcia, General Manager and founder member of CentroMAIL, said:
'CentroMAIL's long established and well respected reputation in Spain will be further enhanced by becoming part of Electronics Boutique. EB's considerable knowledge of the video and computer games retailing business will be invaluable to the development of the business in Spain going forward and we are very pleased to be joining the Company.'
